Jargon Buster
Rebuilding cost
This is the recommended amount (assessed by your property
valuation) that you should take out buildings insurance
cover for.
Redemption
This is the right of the mortgagor to recover mortgaged
property on repayment of the loan and any interest due.
This legally means that once you as the borrower have
finished repaying the loan you took out, the property
is yours and the lender has no further claim on it. If
you pay off the loan ahead of schedule you may face a
redemption penalty which compensates the lender for loss
of interest.
Redemption penalties
Charges paid to the lender in compensation for lost interest
if you redeem your loan ahead of schedule. Penalties can
be a fixed sum of money, though are often proportion of
the loan.
Redemption statement
The outstanding amount to be repaid on an existing loan.
Redundancy insurance
A form of income protection that does not cover any form
of sickness, injury or disability. The purpose of this
type of policy is to replace income lost through a short
to medium term period of redundancy. It provides you with
a monthly tax-free income to cover a portion of your lost
earnings. It is often sold in conjunction with the accident,
sickness and disability element of income protection policies,
in which case it is known as Accident, Sickness and Unemployment
(ASU).
Reinstatement value
The cost of rebuilding your home should it be destroyed.
Remaining balance
The amount of unpaid principal on a home loan.
Remaining term
The original loan term minus the number of payments made.
Remortgage
The process of switching your mortgage loan from one lender
to another without necessarily moving house.
Repayment period
The period over which the borrower must repay the lender.
Repayment plan
When a borrower falls behind in loan payments, many lenders
will negotiate a repayment plan rather than go to court.
Repayment term
The period of time over which you will repay your mortgage
to the lender.
Repo rate
The Bank of England base rate.
Repossession
Usually occurs after a borrower seriously defaults on
payments. The lender then legally evicts the borrower
and usually auctions the property to recover losses.
Restructured loan
A loan in which new terms are negotiated.
Retail Price Index
An index of the average level of prices in the UK. Insurance
companies often link contents insurance policies to it.
Retrieval cost
The cost incurred to recover amounts or items.
Review of rate
The interest rate you are charged can be reviewed either
annually or on a monthly basis. This feature does not
affect fixed rate loans during the fixed period.
RPI
An index of the average level of prices in the UK. Insurance
companies often link contents insurance policies to it.
